2012 Second Quarter International Trade Wrap-Up

24 July 2012

Below is a summary of international trade initiatives of interest to the toy industry during the second quarter of 2012; for additional information and regular updates, please see the International Trade section of the North American Toy Industry Association (TIA) website.

CBP All-Threats Trusted Trader Co-Creation Working GroupIn collaboration with the trade community, U.S. Customs and Border Protection (CBP) recently established a working group, to “co-create” a framework for a program that will address and mitigate security, trade, and import safety threats that can compromise international supply chains … essentially, an “all-threats trusted trader program.” Previously, CBP has successfully “co-created” with the trade community on projects such as the Advanced Cargo Automated Screening Program and the Simplified Entry Program. CBP has also instituted voluntary trade compliance programs that may, in the future, be possibly folded into the all-threats trusted trader program.
[More info: CBP Collaborates with Trade Community to Recommend All-Threats Trusted Trader Program]

Extensions of U.S. Sanctions on Burma/MyanmarWhile the Office of Foreign Assets Control (OFAC) of the U.S. Department of Treasury recently issued General Licenses for both “new investment” into Burma as well as for the export of U.S. financial services to Burma, in contrast, the leaders of the U.S. Senate Finance and House Ways and Means committees introduced a bill that would extend general sanctions on U.S. imports from Burma. The 2003 Burmese Freedom and Democracy Act, among other things, imposes an import ban on all products originating from Burma. The Act, which is renewable once a year by privileged resolution for a total of three years, is currently set to expire on July 26, 2012. While Burma has taken positive steps toward democracy, the extension of sanctions will ensure that such progress continues.

USITC E-Learning Module for the Harmonized Tariff Schedule of the United StatesIn July 2012, the U.S. International Trade Commission (ITC) released a web-based interactive e-learning module aimed at helping users become familiar with and how to read the Harmonized Tariff Schedule of the United States (HTS). “A Guide to the Harmonized Tariff Schedule of the United States” was initially developed as an in-house training tool for ITC staff, and consists of four lessons providing information on the purpose of the HTS and its role in U.S. trade and product classification, how to read the HTS, how to determine duty rates and access the HTS Online Reference Tool, and special HTS provisions such as those resulting from trade agreements and other special programs. Review sections ensure accurate digestion of each lesson’s information. The module also provides resources and links to other relevant information, including to a glossary of terms and to the HTS itself.

In 2012, changes were made to the statistical breakouts in Chapter 95 -- Toys, games and sports requisites; parts and accessories thereof under heading 9503. The number of statistical provisions has been reduced from seven to five, and the wording has been changed.

CBP Delivers First Phase of Cargo Release (Simplified Entry)In June 2012, CBP announced the delivery of the first phase of Cargo Release in the Automated Commercial Environment. This phase, known as Simplified Entry, will allow importers the chance to file streamlined data earlier in the filing process; providing more information earlier is meant to reduce the time needed for cargo to be released into the stream of commerce, as well as enhance cargo security. By segregating the filing of transportation information from the filing of entry information, Simplified Entry allows for earlier filing of entry information which will, in turn, allow CBP personnel to allocate more time and resources to higher risk shipments. As part of the pilot test that began May 29, 2012, CBP has received the first Simplified Entries at the three pilots of Indianapolis, Chicago and Atlanta. Of the nine pilot participants selected in December 2011, by June 2012 six had begun filing Simplified Entries.

CBP Now Sharing Information with Trademark HoldersIn accordance with a recent Interim Final Rule implementing part of the National Defense Authorization Act of 2012, U.S. ports now have authority to disclose to intellectual right property holders information that appears on merchandise or retail packaging that may compromise information otherwise protected by the Trade Secrets Act. CBP’s ability to share unredacted samples and photos of suspect counterfeit goods with intellectual property holders of items detained at U.S. borders is aimed at helping CBP determine whether the goods bear a counterfeit mark. The National Defense Authorization Act of 2012 included information on trade secret sharing because of concerns over possible infiltration of counterfeit electronics into the Department of Defense supply chain. A later amendment to the underlying bill expanded the language to cover all counterfeit goods entering the U.S. and subject to CBP inspection. CBP has already begun issuing guidance information to field offices, ports and personnel so that port inspectors may begin immediate implementation of this policy.

100% Maritime Cargo Scanning Mandate Deadline ExtendedIn early June 2012, Department of Homeland Security (DHS) Secretary Janet Napolitano, in a letter to Congress, extended by two years the deadline for instituting the controversial 100% scanning mandate on maritime cargo containers. Napolitano justified the extension by concluding that 100% scanning is “neither the most efficient nor a cost effective way to secure our Nation and global supply chains against nuclear terrorism.” This assessment was based on the estimated $16 billion cost to implement the mandate as well as DHS’ experiences under a pilot program that placed scanning equipment in six foreign ports from 2007 to 2010.
The law underlying the mandate, the Implementing the 9/11 Commission Recommendations Act of 2007, allows DHS to extend the 100% scanning deadline by two year increments “for containers scanned in a port or ports” if two of six conditions included in the law are met. The DHS, however, instead of requesting a delay for specific ports, has instead opted for a blanket extension of the deadline. The first condition Napolitano asserted had been met is that putting scanning measures in place “will have a significant and negative impact on trade capacity and the flow of cargo.” The second condition referenced by Napolitano is that systems to scan containers “cannot be purchased, deployed or operated at ports overseas because ports do not have the physical characteristics to install such a system.” The four other conditions included in the underlying law—that scanning systems are not available, that systems do not have a sufficient low false alarm rate, that scanning systems cannot be integrated with existing systems, and that the systems do not provide automated notification—were not addressed by Napolitano.